A mechanical and electrical (M&E) subcontractor that argued an adjudicator had gone off on a “frolic” when determining the cost of “defective” work has been ordered by the High Court to repay a contractor more than £100,000.
Loughton-based VMA Services Ltd accused the adjudicator of “ignoring” evidence and using “guesswork” to assess the true value of work it had completed for Project One London Ltd (POL).
The case concerned a £387,696 contract, signed in October 2023, for VMA to design and install mechanical works at 1-4 Munro Terrace and 112-114 Cheyne Walk in London.
A long-running legal dispute then began in 2024 when POL withheld its final payment of £106,435 to VMA, claiming the design of the air conditioning was defective.
Despite POL taking VMA to adjudication to determine the true value of the work, its failure to serve a valid Payment Notice or Pay‑Less Notice led to POL being ordered to honour its payment to VMA of £112,034, which included interest.
However, after POL paid the amount, it disputed the decision.
In September 2025, a new adjudicator reduced the overall value of the work to £157,890 and ordered VMA to repay POL £102,657 by 25 September 2025. No interest was awarded.
However, VMA failed to pay and POL took its case to the High Court for enforcement of the decision.
VMA claimed the ruling was a breach of natural justice on three grounds.
It firstly argued the adjudicator had gone off on a “frolic” and taken into consideration air conditioning pipework even though it said this issue had not been raised previously.
Secondly, it claimed evidence in relation to the cost of a water tank was ignored and accused the adjudicator of using “guesswork” to establish the value of the work, and lastly that the level of reduction applied was “arbitrary”.
The judge dismissed all VMA’s claims.
He said the adjudicator had done the “best he could” in considering the pipework, as he had been presented with “unhelpful and imprecise” evidence in relation to the air conditioning defects.
As the adjudicator had found the pipework was “likely defective”, the valuation of the air conditioning work would be affected and VMA had been given an opportunity comment on it.
The judge added that as a result the arbitrator’s reduction of VMA’s calculation of £47,407 by 50 per cent was not arbitrary.
In relation to issues surrounding an uninstalled water tank, VMA had alleged the adjudicator, who deducted 25 per cent off VMA’s pricing, had “ignored undisputed evidence and substituted his own guess as to the valuation”.
“There is nothing to suggest that the adjudicator deliberately ignored any evidence,” the judge said. “I consider this criticism to be misconceived.”
On the “arbitrary” claim, the judge said the adjudicator “was providing the best approximate valuation he was able to produce in the time available”.
“That is exactly what the courts require adjudicators to do: no more and no less.”
Summing up, the judge added: “This is a classic case of a losing party seeking to comb through the adjudicator’s reasons and identify points upon which to present a challenge under the labels ‘excess of jurisdiction’ or ‘breach of natural justice’.”
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Cristina Lago